The Best Thing I Heard From Berkshire's Annual Meeting Didn't Come From Buffett

Can we be honest here?

It was yet another Warren Buffett shareholder weekend. That meant another year of Twitter pics of journos sticking mics in front of Buffett's face while he walked a convention floor holding a Dilly bar, another year of interviews of Buffett shareholders that have held their stock for 45 years; another year of Buffett telling us to buy stocks and hold them for 100 years -- actually don't necessarily buy stocks, buy the S&P 500 and hold it for 100 years.

Once again, Charlie Munger stole the show -- this time with a tweak of the inferior executive known as Tesla (TSLA) CEO Elon Musk. Musk, of course, responded sarcastically on Twitter in his child-like manner instead of a 46-year-old executive trying to make his electric car company profitable.

In the end, it was another boring Buffett weekend -- the gatherings just don't pack the same educational and news punch they once did. Using media terms, Berkshire Hathaway's (BRK.A) Buffett has become overexposed.

The most interesting thing I learned from Buffett this weekend didn't actually come from his mouth but instead via a Wall Street analyst. To those calling for a recession this year, check this one out from RBC Capital Markets analyst Matthew McConnell who attended the Berkshire gathering:

"NetJets representatives were clearly optimistic about the strength of the business jet market, buoyed by healthy economic recovery, increase in the wealth of high net worth individuals, potentially some improving sentiment around business jets, and benefits from the December 2017 tax cut. This is consistent with our view that the business jet market is finally in a durable recovery after years of false starts and solid industry-wide business jet results in 1Q18. Individuals in NetJets' fleet management and service operations were joking that they are asking the sales people to cool it for a while given the recent strong growth. Corporations are roughly half of NetJets customers, and these companies benefit from the immediate deductibility of the capital expenditure (their portion of a fractional aircraft purchase). Fractionals are sold on the basis of an aircraft operating 800 hours per year, and are typically sold in 1/8 (100 hour) increments. NetJets estimates that fractionals are more economical than outright ownership for a customer that utilizes a business jet for less than about 250-300 hours per year." The analyst adds that Textron (TXT) , an Action Alerts PLUS holding, has one of the hottest jets for NetJets.

Everything You Need to Know About Warren Buffett (Watch)

All Eyes on Drugs

Drugs and broader healthcare stocks are in focus early this week ahead of planned speech Tuesday from President Trump on efforts to combat high drug prices. The president is expected to slam the system of drug rebates and share several efforts to bring down costs. "While we don't expect any of the proposed changes to be effective immediately given legislative and regulatory actions will likely be required, we do think that the president's scheduled speech will mark the beginning of another chapter in the drug pricing reform debate," said Goldman Sachs analyst Jami Rubin.

The space that could come under the most pressure are the pharmacy benefit management players, an industry that thrives on the rebate system. Stocks to watch include: CVS Health (CVS) (owns PBM Caremark) and Express Scripts (ESRX) (and by extension Cigna (CI) , which is trying to acquire Express Scripts).

Around the Horn

Starbucks (SBUX) execs seem very motivated right now to jump-start their sagging stock price, as seen with their clever $7.15 billion distribution deal with Nestle. Starbucks will use the cash from the deal to buy back stock. That's all well and good, but the fact remains that Starbucks' profit margins are likely headed lower from recent peaks and Wall Street knows it.

Norwegian Cruise Line (NCLH) CEO Frank Del Rio tells me 2019 is off to a strong start and there are no signs in his business of a looming recession.

Action Alerts PLUS holding PayPal (PYPL) is due for a good session on Monday after CEO Dan Schulman gave a bullish 45-minute interview with Jim Cramer at TheStreet's Investor Boot Campconference on Saturday. Schulman downplayed the threat of Amazon (AMZN) in mobile payments and talked up the hot China market.